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Computer Software Development Industry Profile Excerpt
| SIC Codes: 7371, 7372 NAICS Codes: 511210, 541511 Page Length: 10-12 Last Quarterly Update: 12/8/2008 View Sample Industry Profile |
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Computer software production in the US involves about 50,000 companies with combined annual revenue of about $180 billion, more than half from sales of packaged products and the rest from custom programming. Large companies include Microsoft, Oracle, Computer Associates, and Electronic Arts. The packaged products segment is concentrated: the 50 largest companies hold about 70 percent of the market. The custom programming segment is highly fragmented.
COMPETITIVE LANDSCAPE
The US economy heavily influences business spending for software products. The success of programming companies depends heavily on strong technical expertise. The success of packaged-software companies depends on technical expertise and good marketing. Small software companies compete mainly by developing packaged products in small niches or producing custom products for individuals. Many small companies form alliances with larger ones to market their products.
PRODUCTS, OPERATIONS & TECHNOLOGY
Packaged software products are generally small programs that can be installed and operated by the customer without assistance. Business-oriented packaged products may cost up to $10,000, but most consumer-oriented products cost less than $500. Custom programming either creates a new software product from scratch, or, more typically, customizes an existing software product for customer use. Custom program products can be very large, costing millions, and may require special training and technical support.
Software is of three major types: operating systems, like Windows, UNIX and Linux, that allow computers to perform basic functions; user applications, like word processing, spreadsheets, and games that run on individual ...
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